ID theft hit 9.9 million Americans last year, says FTC

With identity theft, a thief takes over a consumer's identity by stealing critical private information, such as his or her Social Security number, driver's licence number, address, credit card number or bank account number.

The thief can then use the stolen information to illegally obtain loans or credit lines to buy goods and services under the stolen name. Identity thieves typically change the consumer's mailing address to hide their activities.

Research company Synovate surveyed 4,000 Americans for the FTC. The results show that over the last five years, 27.3 million Americans have been victims of identity theft, 9.9 million in the last year alone. The cost to businesses and financial institutions amounted to nearly $48 billion last year, while consumer victims reported $5 billion in out-of-pocket expenses.

"These numbers are the real thing," said Howard Beales, Director of the FTC's Bureau of Consumer Protection. "For several years we have been seeing anecdotal evidence that identity theft is a significant problem that is on the rise. Now we know. It is affecting millions of consumers and costing billions of dollars."

The survey reports that 51% of the victims - about five million - say they know how their personal information was obtained. Nearly one-quarter of all victims said their information was lost or stolen, including lost or stolen credit cards, cheque books or social security cards. Stolen mail was the source of information for identity thieves with 4% of all victims - 400,000 in the last year.

The survey was released in the same week as a new coalition to fight ID theft was announced. Visa, Amazon.com, eBay, Microsoft, VeriSign and others from the financial services, IT and e-commerce industries are joining together to form the Coalition on On-line Identity Theft.